Following one year pilot, Government announces intention to roll out IPC nationally by publishing new framework

The future success of the Integrated Personal Commissioning (IPC) programme may be at risk unless prepaid account functionality is more widely adopted by Local Authorities according to Prepaid Financial Services (PFS).

A key element of IPC and a legal obligation of the Care Act is about choice and enablement, allowing the service user to receive a personal budget in order to have maximum control and independence over how their needs are met. Currently only around half of Local Authorities offer prepaid accounts as an alternative to a traditional bank account and a way to meet this ‘choice and enablement’ mandate, and unless they are confident in their ability to manage these programmes, the success of future personal budget initiatives may be compromised.

Noel Moran, CEO of PFS said: “Prepaid is the obvious choice for the direct payment of personal budgets and has huge benefits for both parties over using traditional bank accounts. However, if it is not used at all or only used for distribution with no data mining or monitoring, there is a massive missed opportunity. As the government has today announced a full IPC roll out, those local authorities who have not yet fine tuned their prepaid account programmes are likely to see lower cost savings and efficiencies than those who are fully proficient in advance.”

PFS has categorised the main reasons for the remaining Local Authorities not switching to prepaid technology as follows:

Inertia: a resistance to change or an ‘eleventh hour’ mentality, where alternatives to existing services will not be implemented until nearer a deadline.

Noel Moran said: “Whilst prepaid programmes are extremely agile and can be rolled out within a very limited time frame, the most successful programmes will involve all stakeholders and end users in the strategy, implementation and communication for best results.”

Legalities: citing a ‘grey’ area in the legislation about whether there is a need to offer a choice in the way direct payments are made or simply a choice in the way funds are spent.

Noel Moran said: “Local authorities who are resisting implementing prepaid accounts based on the legalities of offering choice via ‘spend’ rather than ‘disbursement method’ are missing the point somewhat and jeopardising the potential of the IPC.

Poor understanding – service user:a lack of understanding of the benefits that a switch to prepaid can bring for the service user.

Noel Moran said: “In particular, many local authorities seem unaware that under the Current Account Switching Service (CASS), transitioning an end user’s regular payments from a traditional bank account to a prepaid account is quick and easy. In addition, for new service users who do not have access to traditional banking services or do not want an additional bank account, opening and maintaining a prepaid account requires significantly less administration as all spend can be monitored online without the need to supply statements, receipts, invoices etc. to justify the expenditure from the account.”

Poor understanding – local authority:a lack of understanding of the benefits that a switch to prepaid can bring for the local authority.

Noel Moran said: “Once a prepaid account programme is implemented, the local authority is better able to monitor all transactional activity and the reliance on the service user to provide evidence is removed. In fact, councils who have tight controls over their direct payments via prepaid accounts, report a 5-10% saving due to the ease of monitoring and clawback of unused or inappropriate spend – in part because all departments from health to social care and accounts can all access data in real time. Procurement teams are also able to shape their local market by identifying which organisations are providing care to their service users, assess fees and set fair rates.”